Apple’s revenue hits another record as it navigates supply chain crunch

Apple posted record revenue of $123.9bn in the fourth quarter of 2021, an 11 per cent gain from a year before as its services business expanded and chip shortages were largely confined to iPad sales.

The iPhone and computer company’s net profit in the last three months of the year jumped 20 per cent to $34.6bn, well above forecasts for $31.1bn. Revenue surpassed analysts’ expectations of $119bn and the $111.4bn reported a year earlier.

Apple’s stock jumped 5 per cent after the release of its results late on Thursday.

Finance chief Luca Maestri told the Financial Times the supply chain problems plaguing broad swaths of the economy cost Apple “more than $6bn” in revenue, a similar amount as the prior quarter. Investors had anticipated the supply headwind to be closer to $10bn based on the company’s previous comments.

Maestri said supply chain concerns were being resolved, adding: “We expect to set a March quarter revenue record and we expect to grow revenue solidly on a year-over-year basis.”

The Cupertino-based tech giant, which briefly attained a market value of $3tn earlier this month, said the iPhone accounted for 58 per cent of total revenues, rising 9 per cent from a year ago to $71.6bn. Analysts had expected $67.4bn in sales.

“The top five selling smartphones in the US and Australia were all iPhones,” Maestri said. “The top four in urban China were all iPhones.”

Revenues in China climbed 21 per cent to $25.8bn, while sales in the Americas rose 11 per cent to $51.5bn and sales in Europe climbed 9 per cent to $29.7bn. Japan was the only soft spot, with sales falling 14 per cent to $7.1bn; sales in the rest of Asia climbed 19 per cent to $9.8bn.

According to research group Counterpoint, Apple’s smartphone shipments in China were up 32 per cent from a year earlier to 50m units, taking the top spot from Huawei after biting US sanctions throttled component shipments to the group.

Asked if Apple needed to overhaul its supply chain at all, chief executive Tim Cook said: “I think our supply chain actually does very good considering the shortages.

“It’s a fast moving supply chain, cycle times are short, there’s very little distance between a chip being fabricated and packaged and going out the factory. So I don’t see it makes [for] a fundamental change in the supply chain.”

Revenue from the services unit, which houses the App Store and digital media purchases, jumped 24 per cent to $19.5bn, above forecasts for a 19 per cent gain. Operating margins for the segment rose to 72.4 per cent, almost double the 38.4 per cent margin on products.

“We have great momentum around paid subscriptions — we now have more than 785m paid subscriptions on our platform,” Maestri said. “That’s 165m up in the last 12 months alone.”

The wearables unit that sells the Apple Watch and AirPods logged a 13 per cent rise in revenue to $14.7bn. Mac sales rose 25 per cent to $10.9bn.

iPad sales were the only category to decline, as Apple prioritised components for the iPhone. Sales of the tablet fell 14 per cent to $7.2bn.